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ASX just the tip - Issue #16

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Today I have put up some thoughts on 4 companies I think are good prospects.
 

ASX just the tip

April 19 · Issue #16 · View online
ASX just the tip -Companies I am buying and my reasons for doing so.

Today I have put up some thoughts on 4 companies I think are good prospects.

So I have not tipped anything recently, and some people have asked me why? Well, honestly it’s because the market has been shit! Every year it seems I lose money holding around this time, so I decided to roll it right back and go heavy on cash, unless I saw some really solid easy trades like TNO in the 60’s and BLK in the 4’s, those have been my only two serious winning trades in the last month.
Onto what I am doing currently. Basically, I have been putting together a list of smaller investments which I am planning to buy or have been buying from now to mid-June which I intend to hold till end of year for the Christmas Santa rally period. The last few years I have found my May/June buys with potential Oct/Nov/Dec/Jan news flow have been consistently making me the most money so that’s what I intend to do.
To understand why I’ve been buying the first company, a little history is required.
I previously recommended a shell, Taruga minerals back in September, it has recently done it’s deal and it has done well, this how I described it in my end of year review:
Luckily for me that review did prompt me to re-enter TAR before the deal came down, I didn’t go on about it on twitter though, as I decided to sell.
So why am I jerking myself off over TAR?? why TAR? There are tons of shells, how did I choose TAR?
The answer to that question is AVZ, so AVZ led me to TAR and now I am at FRN, how?
Some people think Klaus yes Klaus is a good indicator of a deal for sure, but by time Klaus shows up the bottom is usually gone and he is on about 20 different companies right now, how to tell whats what?
Lets have a look at AVZ and TAR top 20 before their deals.

Anything stand out????
Who owns all these companies?? the Steinepreis family on both deals they have been major holders before Klaus showed up.
This guy is a good investor, he doesn’t play around he buys low he buys big he holds long, then he sells and moves on when the deal drops, the guy is making great money without all the fan fare and carry on. I do hate some of his sales, but fact is the guy makes serious bank and I have made bank following him.
Look at this example of just some of his buys on TAR 
So considering what I have seen on TAR and AVZ, I keep an eye out for him and recently something has popped up that caught my attention….He’s been buying.

The company is FRN alittle company with little attention paid to it, the sub ann where he reported his buying got a whole 98 views in the first week or so, no one noticed or cared to look.
It has 250mill shares giving it smack on $5mill Mcap with $2.4mill cash in the bank no debt, for a shell that is super clean.
Current state of the company.
If I had to sum up my feelings in pictures it would be this.

Catalyst here will obviously be an acquisition timing unknown who will vend unknown, this kind of investing is not for everyone, it certainly done well for me though.

Next company
The next company is something that I bought too high, got too excited and have had to average down. So anyone buying this today will have a lower average than me.
They made a good acquisition and the share price is trading about 50% cheaper since then. This I don’t understand, and I was a buyer soon after the acquisition.
The company has a very low valuation it’s cheaper than most shells, yet it has a major project. 

The project
It’s an IOCG project in South Australia, for people unfamiliar with IOCG deposits the biggest kind of deposits in scale can range up to billions in tons multi element hence the name iron oxide copper gold deposit, they can also contain uranium.
If you look within 50km of the project there have been multiple large scale discoveries made, there will very likely be more.
Down side to IOCG deposits is the difficulty and cost in discoveries like the Olympic dam is they are under 350m of barren rocks, so it’s big risk big reward drilling.

So what is the catalyst here? Exploration obviously is CHK scheduled to drill? Nope bad, right.
Well the area has a interesting history next to us our neighbor ARE have a very attractive very large target called the torrens prospect that abuts our tenement to the north and east and further south they have 100% interest in some other prospects.
ARE are running around a $30mill Mcap which is multiples of ours, but more importantly when we look at a complete tenement map we can see that the torrens target area it stretches directly onto CHK tenements, any discovery from their drilling would big news for CHK, it’s essentially risk free drilling exposure, we sit on our hand don’t spend a dime and get upside to a 10bagger drilling campaign.
Looking at the maps you can see CHK is a minnow with a great project, ARE are scheduled to drill in Q3 this year rumor on twitter seems to be July is the plan, and there are some other companies active aswell in the area.
Worst case the neighbors hit nothing CHK becomes a $4mill shell with $2.75mill cash and aggressive management I can live with that, best case it’s a rocket.
Company 3
Next company I have been buying just popped up recently and I did jump on it quickly and got a good priced position, but I have also been buying as of yesterday aswell as the more I think about it I keep coming back to the buy button.
It’s the recent LCD acquisition; I saw a lot of initial focus on it being in Zimbabwe and the project being lepidolite lithium mineralization.
First Zimbabwe is fine with me I have made more money investing in DRC companies than anywhere else by a margin, Zimbabwe is opening up it’s time to get involved while things are cheap and available.
These places are where you can pick up cheap quality existing cobalt,lithium,copper,gold projects that will take a sub $5-10mill company to hundred million+ market cap.
Second Klaus eckhof was involved in securing lithium projects for TAW and he was the one who brought Manono to AVZ, I think he knows what his doing in regards to lithium.
Does anyone have a better track record? Do I believe this is the final project? Fuck no.
TAR picked up 3 projects before it got it’s good cobalt land, AVZ picked up quite a few tenements before picking up manono.
So the eckhof clan is on the board Klaus and Gasson vending for a bucket of shares, it’s a TAR copy.
Previously discussed Steinepreis family are on the board and holding significant amounts aswell….
It’s also well cashed up from a recent divestment of a gold project and a large raise.
There are alot of good projects in Zimbabwe if Klaus is angling for one I want in, catalyst I expect is a better flagship project.

Company 4
Another company I have been watching is CAZ, I wasn’t planning to buy any CAZ because they are so cash poor, but I had a very low order in which got hit on a brief sell down.
It looks like it’s being handicapped probably due to being too cash poor, so I am watching it once they raise money get to doing drilling, it’s hard to imagine it will be at current levels.
They haven’t been on the ground yet so not much to say, but if they can find any kind of outcrop or show some trenching results similar to CLA did they will be a hype drill campaign later in the year.
My biggest concern in short term is lack of money, once the money is raised I will settle in and just wait for them to start work, they have large parallel stretches of the same kind of dolomite unit CLA have drilled, so it won’t take more than a few holes to determine if the dolomite contains the same cobalt mineralisation that CLA has shown.
Pretty good story to follow I feel.
Cheers for reading 
T54
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